Tesco undeterred by fate of rivals

Tesco Stores, one of the largest retailers in the UK, entered the Taiwan market in 2000 and has since set up three hypermarkets, one each in Taoyuan City, Chungli City and Tainan City. Staff reporter Annabel Lue recently spoke with the company's Taiwan CEO, David Orchard-Smith about the company's opening of its first outlet in Taipei in late July and about Tesco's strategies

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Taipei CEO of Tesco David Orchard-Smith talks about how his company will carve out its niche in a competitive market.

PHOTO: GEORGE TSORNG, TAIPEI TIMES

Taipei Times: Tesco Taiwan is going to open its first store in Taipei this month, is there anything special you plan to bring to Taipei customers?

David Orchard-Smith: Tesco will bring a brand new city format to Taipei. This will be a new international retailing standard for the sophisticated customers of Taipei City. Tesco will offer the best customer service, top quality fresh foods, and competitive prices on a massive range. We aim to be the most desirable store in Taipei city. Besides the Taipei store, Tesco has 3 stores of hypermarket format in Taoyuan and Tainan. We serve 120,000 families a week and have over 300 mall tenants.

Taipei Times: Is this a sign that Tesco will focus more on running smaller-scale hypermarkets in Taiwan?

Orchard-Smith: The Taipei store is tailor-made for Taipei customers. It's not about the scale; it's about the customers and the size of the site. That's how Tesco works globally to create a range of store formats to suit our customers and catchments. There are eight current Tesco formats available internationally. We will continue to concentrate on delivering the best value for customers in all formats and all markets.

Taipei Times: What took you so long to set up a store in Taipei?

Orchard-Smith: Good locations for customers are the key to success for a retailer. It is not easy to get suitable sites in Taipei. We believe our new Taipei store will be one of the best sites in the city. We are committed to further development and are working with the Taipei City Office, the European Chamber of Commerce and the Ministry of Economic Affairs to try to get more land made available for commercial [use] in Taipei.

Taipei Times: In February Dutch-based cash-and-carry wholesaler Makro shut down all six of its Taiwan stores and pulled out of the market. Is this an indicator the local hypermarket sector is nearly saturated?

Orchard-Smith: Today's consumer demands much higher retailing standards. Tesco delivers these consistently, Makro could not match these exacting standards. Our customers tell us they want a modern and comfortable shopping environment, great service, available range, no queues at the checkout, and above all, competitive prices. The market is changing, as in all industries only the strong and the innovative who listen to their customers and deliver their needs will survive.

Taipei Times: One retail market analyst said with Taiwan's limited space, only about three hypermarket players can ultimately survive. Currently in terms of store numbers, Tesco lags far behind its rivals. Carrefour, RT-Mart and Far Eastern Geant Co, so what are the competitive edges Tesco has to secure its survival and development in the local market?

Orchard-Smith: Scale is certainly important and we are progressing our development plans. What is important for us is being No. 1 everywhere we open. We certainly have achieved this in our current locations in Tainan, Chungli and Taoyuan and against tough competition. Customers shopping with us are returning time and time again, because we exceed their expectations and that is what I want -- delighted customers through our doors.

Taipei Times: Tesco entered Taiwan several years later than most competitors. Has this been a major disadvantage to your local development?

Orchard-Smith: Being the first is not always the best, take Makro for example. For Tesco, the UK core business has been our solid platform. We started our international expansion in 1997. Currently we dominate the competition in seven out of the nine countries we operate in worldwide.